Homebuilder exchange traded funds are outperforming the market by a wide margin in 2012 on better housing data, although a report Tuesday revealed new construction of single-family homes declined in February.

The iShares Dow Jones US Home Construction (NYSEArca: ITB) is up 37.3% over the past three months, more than doubling the 17.6% gain for the S&P 500, according to Morningstar. SPDR S&P Homebuilders (NYSEArca: XHB) is another ETF that invests in housing stocks.

“New construction of single-family homes, which account for three-quarters of the housing market, dropped nearly 10% to an annual rate of 457,000. Construction of single-family homes is still running 18% higher compared against a year ago, however,” according to a MarketWatch report on the February data.

Permits, a leading indicator, rose 5.1% last month to the highest rate since October 2008. [Builder ETFs: Finally Out of the Dog House]

Builder confidence in the housing market was unchanged in March, according to National Association of Home Builders/Wells Fargo Housing Market Index released Monday. The benchmark is holding at its highest level since June 2007.